Monday 21 January 2019

Background to Irish developers' complaint

Michael O'Flynn
Michael O'Flynn

Yesterday's ruling by the European Commission brings to a conclusion a process which traces its roots to October 2015, and Nama's announcement of its plan to deliver 20,000 new homes between 2016 and 2020 at an estimated cost of €4.5bn.

While it may have sounded like good news, it was of major concern to those developers whose businesses weren't being supported by Nama.

As far as Michael O'Flynn (pictured), Paddy McKillen, David Daly, Pat Crean and Brian McKeown were concerned, Nama and the developers it supported enjoyed distinct advantages over non-supported developers on a number of important fronts. These included the cost of funds, site cost recovery requirements and unique access to other public bodies.

In terms of borrowing money for development, the group of five had learned that Nama was charging the developers it supported interest rates of between 4pc and 5pc - or less than half the average rate of 11.4pc they and other non-Nama developers were having to contend with.

Believing the potential for market distortion to be "self-evident", the developers lodged a complaint with the EU's Competition Directorate in December 2015.

Irish Independent

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